As of December 31, 2024, Uganda’s forex bureau and money remittance sub-sector had handled foreign currency transactions worth UGX17.82 trillion, reflecting the growing role of this non-bank financial segment in facilitating trade, household welfare, and economic resilience. Mackay Aomu, the Director of the Non-Bank Financial Institutions Department at Bank of Uganda, told participants at a recent capacity-building workshop for directors and managers of forex bureaus and money remittance businesses that that remittance inflows reached USD 921.76 million (approximately UGX 3.48 trillion), while outflows stood at USD 214.45 million (around UGX 810 billion). These figures underscore the growing significance of the sub-sector as a critical source of foreign exchange, especially at a time when international remittances are gaining prominence as a pillar of household income and national economic stability. “Many market participants consider forex bureaus and money remittance businesses more accessible compared to other financial institutions,†said Aomu, highlighting the sector’s inclusivity and grassroots reach, particularly for underserved communities and those without formal banking access. The forex and money remittance sub-sector currently comprises 292 licensed entities, of which 192 operate purely as forex bureaus, 90 offer both forex and money remittance services, and ten specialize in money remittance services alone. These businesses serve as key intermediaries, linking Ugandans to international financial systems whether for trade, education, healthcare, or family support. Remittances, especially those sent by Ugandans in the diaspora, continue to be a vital source of household income, contributing to improved education outcomes, access to health services, and investments in small businesses. The USD921.76 million in inflows in 2024 represent not just money sent home but also potential capital that can drive consumption, domestic investment, and financial inclusion. Beyond individual welfare, these inflows support macroeconomic stability. By supplementing the country’s foreign exchange reserves, remittances help reduce dependence on external debt and buffer the Ugandan shilling against volatility. Additionally, by channelling funds into the formal economy through licensed forex bureaus and remittance businesses, the sub-sector ensures better tracking, transparency, and contribution to the tax base. Despite these promising figures, Aomu highlighted several to regulatory challenges. He emphasized the need for licensed operators to strengthen their relationship with external auditors, ensure full compliance with the Foreign Exchange Act Cap. 167, and address weaknesses in statutory reporting. “There are gaps in statutory reporting that must be urgently addressed to enhance the integrity and performance of this sub-sector,†Aomu stated. The workshop, organized by Bank of Uganda, specifically targeted these concerns by equipping licensees with knowledge on compliance frameworks, reporting obligations, and risk management practices. Stakeholders were urged to uphold financial reporting standards, especially as the sector continues to grow in complexity and value. Strengthening data reporting and regulatory oversight are important as they would help Uganda leverage on the many benefits of the s sub-sector not just for foreign exchange stability but also as a reliable channel for development finance, diaspora investment, and private sector growth. With continued support from the Central bank and greater cooperation from licensees, the forex bureau and remittance sector is set to become a more powerful engine of economic resilience and inclusive growth for Uganda.
